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Blockstation and Jamaica Stock Exchange Go Live with DSO Integration

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Ready, Set, Go!

In a pilot program that dates back to 2018, the Jamaica Stock Exchange and Blockstation were able to demonstrate the future potential of digital securities.

Fast forward to 2020, and this relationship has paid dividends, as the pair has just announced the official launch of their new platform.

Through a series of services, Blockstation can host digital securities offerings (DSOs) for companies in search of capital through the Jamaica Stock Exchange.  As a result, this capability brings Blockstation into rarified air, as they become one of very few tokenization platforms working so intimately with a traditional, regulated exchange.

Platform Offerings

While the new platform is being touted as a comprehensive ‘end-to-end’ solution, Blockstation decided to focus on a few key features/benefits on offer.  The following points are drawn directly from their announcement.

  • Built-in Know-Your-Client (KYC) and Anti-Money Laundering (AML) functionality to satisfy regulatory obligations
  • Prospectus+ Smart Listing Accelerator Portal streamlines the creation of complete and compliant disclosure documentation
  • Centralized digital filing and communication between all stakeholders to complete the IPO
  • Real-time reporting  and trade monitoring to mitigate abusive market tactics
  • Dramatically reduced costs and timelines to conduct an IPO

Champing at the Bit

Building on the positivity surrounding the integration of Blockstation and the JSE, is the fact that various companies are already getting their ducks in a row to take advantage.

Despite just going live, there are already 5 companies being assessed for a potential DSO hosted by the JSE.

Caribbean Presence

Perhaps because of their successful relationship with the JSE, Blockstation also finds themselves making inroads into another Caribbean nation – Barbados.

We previously reported on an MOU between the pair at roughly the same time as the pilot with the JSE.  With the announcement of a finalized integration between Blockstation and JSE just occurring, will we soon see a similar announcement involving the Barbados Stock Exchange?

Eyeing Digital Securities, Barbados Stock Exchange Chooses Blockstation

Commentary

Marko Hafez, CEO of Blockstation, states,

“We are excited to officially launch the Prospectus+ Smart Listing Accelerator Portal for issuers to tokenize their equity and list on a regulated stock exchange…The portal features low costs, short timelines and international reach, making Tokenized IPOs suitable for companies of all sizes and an attractive proposition for issuers who never would have considered going public in the past.”

Marlene Street Forrest, Managing Director of JSE, states,

“Blockstation’s platform incorporates familiar compliance rules to ensure a fair marketplace. We have spent considerable time and effort in our quest to move forward with Blockstation and to date, the training and support they have provided have been excellent.”

BlockStation

Founded in 2015, Blockstation maintains headquarters in Toronto.  The team behind Blockstation work to develop solutions meant to integrate traditional exchanges with blockchain based technologies.

CEO, Marko Hafez, currently oversees company operations.

Jamaica Stock Exchange

Founded in 1969, the Jamaica Stock Exchange maintains headquarters in Kingston.  This regulated exchange has become the nation’s de facto trading platform since being launched roughly 50 years ago.

Managing Director, Marlene Street Forrest, currently oversees company operations.

In Other News

Over the past year, we have reported on various developments surrounding Blockstation.  Whether establishing partnerships with exchanges, establishing industry framework, or attempting to lure athletes to the great white north, the company has remained busy.

Blockstation Joins the IIROC

Blockstation to Host DSO in Attempt to Lure Kawhi Leonard

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Joshua Stoner is a multi-faceted working professional. He has a great interest in the revolutionary 'blockchain' technology. In addition to this, he is a licenced Paramedic in Nova Scotia, Canada. As such, he can provide emergency care/medicine to any situation necessitating it.

Exchanges

DLT Replacement of ASX ‘CHESS’ Program Delayed

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Inevitable Delay

Dating back to 2015, the ASX has been developing a replacement for their ‘Clearing House Electronic Subregister System’, also known as ‘CHESS’.  While they have a plan, and it is in motion, the popular exchange has suffered various setbacks along the way.

The latest of which is due to COVID-19.  With so much market uncertainty, and workforce disruption arising from the pandemic, many of ASX’s partners are simply not ready.  As such, in order to provide, both, themselves and their partners with ample time to ready their systems for the eventual upgrade, ASX has postponed the event.

In their public statement, ASX clearly listed COVID-19 as the reasoning behind this delay, by stating,

“ASX is replanning the CHESS replacement implementation timetable due to the uncertainty created by the unfolding COVID-19 pandemic”

This delay will see ASX reconvene in June, to discuss a new launch date for their replacement program.  This launch will occur sometime after April of 2021.

In October of 2020, all users of the exchange are expected to be able to begin using the replacement system in a testing environment.

CHESS

Launched 25 years ago, CHESS is a computer system operated by ASX subsidiary, ASX Settlement.  It marked the exchange’s first steps towards electronic shares vs. physical shares.  ASX notes that they rely upon this system for two major functions.

  1. Clearing and settlement of trades
  2. Electronic registry of shares from listed companies

The system has worked well to date, and will continue to do so until it is replaced.  The ASX has noted, however, that they are always looking to the future, and what can be done to streamline operations.  The implementation of distributive ledger technology, as a replacement for CHESS, is one of these forward looking moves.

Anticipated Benefits of DLT

While CHESS may have marked a major step forward at the time of its implementation, the 25 year old system has obviously begun to show its age.  While fully functional, it simply is not as cost effective, flexible, or quick as what new technologies can provide.  The following are a few of the anticipated benefits of DLT, once implemented.

  • Clearing Times
  • Settlement Times
  • Cost Savings
  • Reduction in Parties Involved

Once implemented, the ASX will be primed and ready to support what many feel will be a major step forward – the hosting of digital securities.

Commentary

In addition to outlining the reasoning behind the delay of their replacement for CHESS, ASX Deputy CEO, Peter Hiom, took the time to comment.  He stated,

“ASX remains fully committed to CHESS replacement. We continue to progress the project, including system development and testing, supporting back office software developers, and assisting users in their readiness activities. The investments we are making in the new system and in distributed ledger technology are for the long-term benefit of the financial services industry and the Australian economy.”

Australian Securities Exchange (ASX)

Founded in 1987, the ASX operates out of Sydney, Australia.  Since their launch, the company has grown into one of the largest full service exchanges in the world.  The company describes their full services as including listings, trading, clearing, settlement, tech & info services, and post-trade services.

Deputy CEO, Peter Hiom, currently oversees company operations.

In Other News

The effects of COVID-19 are already widespread across basically every industry.  This includes tech, and the world of blockchain.  We recently took a look at a few of the various ways the ongoing pandemic is changing the way many operate.  Make sure to peruse the following article to learn more.

The COVID-19 Effect

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Exchanges

Binance Adds Tezos Trading Pairs

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Binance adds Tezos XYZ support

This week, one of the largest crypto exchanges in the world, Binance.US, added support for Tezos (XTZ). The addition places XTZ tokens within direct access to millions of traders in North America. As such, analysts predict the move will strengthen XTZ’s market price in the coming days.

News of the addition first came via a social media post from Binance. The post linked to a company blog in which the firm goes into more detail about the maneuver. According to company documents, XTZ trading pairs are active as of Monday, March 16th. Interestingly, the platform allowed investors to deposit Tezos starting the previous day.

Notably, Binance created numerous XTZ trading pairs. These pairs include one stablecoin, BUSD. Additionally, Binance added support for fiat pairs as well. However, the documentation does point out that users will need to complete both AML and KYC security protocols to participate in fiat trades.

Tezos Security Token Issuance

Tezos continues to gain ground across the security token sector. Importantly, the firm managed to secure a bevy of strong partnerships in the industry. For example, XTZ partnered with Latin America’s largest investment bank, Brazil’s Banco BTG Pactual S.A. back in 2019. The deal gave Tezos considerable pull in the region as it involved the tokenization of $1 billion in assets.

Tezos via Homepage

Tezos via Homepage

Since that time, Tezos continued to gain market positioning due to a combination of technology and networking skills. The company saw heavy media coverage earlier this year after the security token issuance platform Vertalo announced the platform would transition from ETH to XTZ. This decision echoed that of another major player in the field, the German-based issuance platform, Fundament, who also made the switch over to Tezos back in 2019.

One of the biggest partnerships Tezos was able to secure to date was with TokenSoft. TokenSoft is a leading security token issuance platform with a huge clientele base. The partnership significantly expanded Tezos’ market penetration as it was reported that $3 billion in security tokens were added to the company’s pipeline.

Why XTZ?

Tezos found a home in the security token sector for a number of key reasons. For one, the Ethereum blockchain has certain limitations imposed by its technical aspects. For example, ETH utilizes a Proof-of-Work consensus algorithm. This style of consensus is both expensive and slower than many other options now available in the market. Basically, ETH can handle only 15 transactions-per-second (TPS).

Additionally, ETH-based smart contracts are written in Solidity. Consequently, this programming language doesn’t allow for an easy formal verification process. Also, the decentralized and open nature of the Ethereum blockchain raises concerns about transactions receiving approval from unauthorized locations. Specifically, issuers shared concerns about individuals in sanctioned countries approving US securities transactions.

Tezos eliminates these concerns with a combination of helpful features. For example, Tezos can both create and verify smart contracts directly from the platform. Also, Tezos doesn’t need to perform hard forks to make major protocol upgrades to the system. This feature is important when you consider the shifting regulatory landscape currently in place. Notably, XTZ can create geo-locked regions to ensure no sanctioned regions participate in transactions.

Importantly, Tezos utilizes a Proof-of-Stake algorithm. This consensus mechanism is less costly compared to PoW and unlike other PoS protocols, any stakeholder can participate in the consensus process and be rewarded for contributing

Tezos Advance Security Token Blockchain

Today, XTZ is one of the key players in the STO sector. As more firms choose this protocol over ETH, more developers gain interest in the blockchain. As it stands now, Tezos is set to overtake ETH’s market dominance in the coming months.

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ECSE to Enter STO Pilot Program with Blockstation

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Pilot Program

Another securities exchange, the Eastern Caribbean Securities Exchange (ECSE), has seen the merit behind digital securities, and signed a fresh letter of intent (LOI) with Blockstation.

This letter represents an upcoming pilot program, which will see Blockstation act as a service provider for the ECSE.

With Blockstation touting a comprehensive tokenization platform, this means offering a variety of capabilities.  It is anticipated that these will allow for the ECSE to support the trading of various assets, such as BTC, ETH, and, of course, STOs.

Caribbean Presence

At this point, it would appear as though the Caribbean has spoken, and made their choice of service provider clear – Blockstation

Each of the following are examples of pilot programs involving Blockstation that have either been completed, are off the ground, or are about to launch.

  1. Jamaica Stock Exchange
  2. Barbados Stock Exchange
  3. Eastern Caribbean Securities Exchange

Features

With regards to the LOI, the ECSE has indicated that they intend to leverage the Blockstation platform, providing their clients with access, but not limited, to the following perks:

  • asset insurance
  • compliant KYC/AML measures
  • SLAP (a Blockstation solution which provides companies looking to host an STO with a streamlined process for creating a prospectus)

Commentary

Upon announcing this newly signed partnership, representatives from each, Blockstation and ECSE, took the time to comment.

Trevor Blake, Managing Director at the ECSE, stated,

“The ECSE is proud to take a leading role in increasing access to and participation in our securities market through digital assets…This pilot follows the pilot being undertaken by the Eastern Caribbean Central Bank (ECCB) of a digital EC dollar (DXCD) that will be the world’s first central bank-backed digital currency, supporting the ECCB’s goal to remove financial frictions, promote financial stability, and expedite growth and development in the member countries of the Eastern Caribbean Currency Union (ECCU).”

Matt Singh, VP of Sales at Blockstation, stated,

“It’s inspiring to see the vision of shared prosperity resonate so strongly in our conversations with the ECSE and financial regulators in the region…We look forward to advancing the ECSE’s goals of leveraging the blockchain to bring transparency, improved security and new economic opportunities to their citizens and global investors.”

Speaking with Marko

In our ongoing interview series, we were fortunate to have recently interviewed the President and CEO of Blockstation, Marko Hafez.  In this discussion, we learn more about what Blockstation has to offer, and how they found themselves helping exchanges like the JSE transform the way they operate.

Interview Series – Marko Hafez, President & CEO of Blockstation

Blockstation

Since being founded in 2015, Blockstation maintains headquarters in Toronto, Ontario, Canada.  Blockstation looks to service and establish the digital securities sector, through their comprehensive tokenization platform.

CEO, Marko Hafez, currently oversees company operations.

Eastern Caribbean Securities Exchange

Acting as a subsidiary of the Eastern Caribbean Central Bank, the ECSE maintains operations in the island nation of St. Kitts.

CEO, Trevor Blake, currently oversees company operations.

In Other News

For those that may recognize the ECSE mother company, ECCB, it may be due to recent news of their decision to create a central bank digital currency.  The ECCB fully intends to be first to market, globally, with their own digital variant of a central bank issued currency.

ECCB to Issue World’s First Blockchain-based Digital Currency

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